The ASX share Altium Limited (ASX: ALU) has been the best performer in my portfolio, but it wasn't always seen as a popular choice.
I've invested in Altium shares several times over the years. I was thinking about doing it again when the Altium share price was sitting at around $8, several years ago. At the time, I mentioned it to a friend who'd classify himself as a growth investor, with a background in technology.
He wasn't very positive about the idea, suggesting that Altium was based on old technology and that it would lose its market position.
Why I bought Altium shares anyway
By that point, my first investment had already done well. Yet, here was someone who knew a lot more about technology than I did saying this business could be on a downward path.
I'm not an expert in software design or electronic printed circuit boards. So, his view was a bit unsettling.
However, from my point of view, the business still gave exposure to the growing amount of intelligent devices, increased electronics, and the rise of the internet of things (IoT).
It also had the excellent leader Aram Mirkazemi at the helm who owned a large amount of Altium shares.
The ASX tech share was still generating strong cash flow, paying a growing dividend, and increasing its cash balance.
Perhaps most importantly, it was still delivering double-digit growing revenue and increasing earnings before interest, tax, depreciation and amortisation (EBITDA) margins.
The ASX share was delivering on the financial side of things and seemingly gaining market share, which suggested the company's software offering was impressing subscribers.
One of the reassuring things to me was that Altium was regularly upgrading its software for the benefit of subscribers. Even if it were possible that Altium's software at the time could have been better, the company was developing it further.
What I learned from my ASX share investment
The Altium share price has gone up by around 475% since I decided to make that investment, as you can see on the chart below.
Sometimes intelligent people can be wrong about an investment, even if it's in their field of 'expertise'.
It was another reminder to me that the best businesses tend to keep winning and that good underlying financial performance can keep going.
Altium has done a number of things to strengthen its market position. One of the biggest and best improvements has been the introduction of its cloud platform Altium 365, allowing engineers to collaborate online. This is a great tool and something that could enable it to take the next step in capturing the market in the coming years.
I hope the business can keep doing well from here, though there's certainly no guarantee on the Altium share price side of things.
However, the company is guiding that in FY24, its revenue could rise by between 20% to 23%, so it could be another good year of profitable growth.
